What are my CGT Implications on these 2 Separate PPR's?

Hi there All hope you're well. Struggling to find an answer to this

I bought land 1 in November 2020 & got a house on it that's getting its certificate of occupancy on October 1st this year. 2021. I'm living in it, then selling it or converting it to an IP rental as soon as property 2 (below) is built.

I have now bought land 2 in July 1st of this year 2021, titling in March 2022, and going to build my next home (to live in as a PPR) after settlement goes through and I can get finance for the build. Once the dwelling is built and I get an Occupancy certificate, I am moving into it and then claiming my PPR exemption over to this property 2 when built, as it will be a bigger CGT event when sold.

Assuming I live in property 2 for 12 months after moving in with my PPR CGT exemption, and then sell, is the net capital gains from the sale 100% exempt? Or is there a portion of the capital gain that is not exempt (such as, the portion of time in which i bought land 2 while i was still living in property1/land1 as land 2 at that time was not my PPR as it was vacant land?) How does this work?


Or, is the time the vacant land 2 was not my ppr, exempt? since i would have built the PPR 2 dwelling on the land within 4 years and move into property2/land2 as soon as reasonably possible to claim the PPR exemption on Property 2?



I am so confused and the ATO has been of no assistance. Hope this makes sense.

Please help, so stuck Would appreciate any advice greatly.

 

Good news. You might not be subject to capital gains tax but to ordinary tax on your profits with no CGT discount or PpOR exemption and to GST

Property development, building and renovating

Go and get professional advice and then consider applying for a PBR.

You might think you have asked a simple question but any advice you get from a forum such as this will, on your scenario, be too general.

For example you may be able to get complete main residence exemption on the second property but as you have exchanged contracts for its land then if the date of exchange is the date of the acquisition, if you do that you will never get main residence exemption on Property 1 as it is not your main residence before you exchanged contracts on Property 2. Whether the date of exchange is the date of acquisition is going to depend on the contract and its conditions. So if Property 2 is going to be your main residence then what are the GST consequences if you sell property 1.

There are helpful people with good experience like Paul@PAS on this forum. Consult and pay Paul or someone else with his experience.

 

Again your question hasn’t given complete information. In the finance thread you are talking about buying 3 lots of land.

(Victoria) What's the best refinance deal out there for my situation? Happy to use a mortgage broker

What would be the best lender for this scenario? Happy to use a broker as well if needed


Also you have basically posted the same finance question twice and the same taxation question twice

New here, what are my CGT Implications in these 2 PPOR's built separately?

If you want multiple opinions try ringing the ATO till someone gives you an answer you like

 

What will you do if you cant get the finance to settle on the land blocks?

 

Its actually a complex, but simple tax issue for a competent property tax adviser. In order that you make the correct choices and retain the correct records its vital you seek personal tax advice. The ATO role is to adminster the tax system. Not assist you to make tax choices. The system caters for this by allowing certain experienced and qualified people to be tax advisers. They assist and support taxpayers make correct choices and can assist you to avoid paying excess tax through errors. The tax system is self assessmnet based on the onus is on you to get it right not the ATO to tell you how. Think of it like asking Police about a legal issue. They can only tell you what is an offence.

The home AND the vacant land are both likely going to eligible for the backdated CGT concession for a main residence however you cant have exemption for both on any day. But each may be a option for certain date ranges. That said you can keep correct records of costs, dates and issues so when one or both are ever sold the correct calculations and choices are made.

The fact you constructed (lets not use "develop" since a developer will intend to sell ....not keep) makes a difference to tax issues but is something an adviser will consider. Also you need to understand the risks if you dcide to sell either in the short to medium term and how it may involve GST and also lead to no use of the main residence concession etc. Then what seems like you home seems more like you are a developer and the main residence concession isnt available !! I would not see any need for a private ruling. The issue is based on fact so tax advisers should be able to guide that. If they suggest a ruling then that is time to consider it. I really dont understand why so many non-advisers keep suggesting simple issues be supported witha BPR. It over burdens the ATO and is leading to the situation where they may be refused or even start charging for such issues to limit wasted time.

Then there is also the depreciation issue.
And the costbase reset issue you should understand.

 

not enough info to answer this post, you should get specific tax advice. No2 could potentially be totally exempt, but it depends on a lot

 

They're all subject to finance

 

Thank you for the help JRC much appreciated. I'll take your advice and pay an accountant specialised in this to advise

 

Thanks so much Paul. This advice is so, so helpful and I appreciate you taking the time to write it out and explain. I'll take your advice and ensure to keep the correct records of costs, dates and issues and also will take your advice to consult with an accountant or someone who is specialised in this to ensure I do the right thing

 

Thanks Terry. Seems that I should be getting professional advice ASAP, will do. Thank you